Santos goes on offensive over CSG protests

A Santos senior executive says protesters were ignoring the access consents Santos had secured with landholders in the Pilliga region in north-central NSW, and were largely ‘trained professional activists’ rather than concerned farmers and locals.
AFR

Santos
has gone on the attack against environmental protesters at its coal seam gas operations in NSW, with ­senior executive
James Baulderstone
accusing them of illegally blocking operations and putting 15,000 manufacturing jobs at risk.

Mr Baulderstone, executive vice-president, eastern Australia, said delays forced by the campaigners were costing up to $200,000 a day, piling up costs that would flow through to even higher prices for gas.

He said protesters were ignoring the access consents Santos had secured with landholders in the Pilliga region in north-central NSW, and were largely “trained professional activists" rather than concerned farmers and locals.

In contrast, the Wilderness Society claims widespread revolt among farmers in the region against coal seam gas.

A series of media releases distributed by the organisation this week quote a number of farmers worried about the impact of CSG drilling on water and land resources.

David Quince, a farmer who took part in a Pilliga protest on Thursday, said gas companies were “lying" on the safety of CSG and that talk of co-existence between CSG and farming was “a total nonsense". “As farmers, we’re all very concerned," Mr Quince told AFR Weekend. “As this drought increases, this has really highlighted we cannot put water resources at risk."

Intensified clash

The intensified clash between ­Santos and protest groups comes one-third through the oil and gas producer’s 15-well CSG exploration program in the Pilliga forest.

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The program is a forerunner for a potential $2 billion project that could meet 25 per cent of NSW’s demand for gas.

Santos has spent more than $1 billion on acquiring and developing its CSG position in NSW, but its aim of starting production in 2015-16 has been stymied by changing state regulations and delayed by widespread protests.

Mr Baulderstone said Santos and its partner
EnergyAustralia
were now aiming to give the go-ahead in late 2015 for the Pilliga project to get gas into NSW by 2017 when the state’s contracted supplies dramatically decline.

He said the exploration drilling program had been delayed so far by about a week, adding up to $1 million to costs.

“Costs are being put through and we’ve got no option but to hand them on to the end user," Mr Baulderstone said, adding that gas prices could shoot up to $10 a gigajoule, rather than the $8 currently forecast.

With conventional gas resources on the decline, the alternative to developing CSG was importing LNG, which risks gas prices as high as $25, he said.

’Risking thousands of jobs’

“I’m staggered that, given where the economy is at the moment, we are not seeing people say, ‘hang on, what are the consequences of these people breaking the law?’. It is risking thousands of jobs," he said.

But Mr Quince said he didn’t believe warnings of a gas shortage and that NSW could source gas from the Bass Strait.

Mr Baulderstone pointed to a lack of public understanding about the vital need for gas in the economy.

“It is not optional, it is not a nice-to-have: you’re talking about energy ­security for the nation and the state that underpins our standard of living," he said.

But he said he was satisfied with ­federal and state government backing for the CSG industry, which had ­enabled Santos to make significant progress on its Pilliga project over the past six months.

“We have that support from the NSW government: we are pleased with that support. What we are now facing is illegal activity from extremist groups."